If you’re considering working with a financial advisor in Seattle, you’ve likely wondered: how much will it cost?
The answer is that it depends.
This is a common question, but there isn’t a fixed answer to it, because the cost of a financial advisor is variable based on a wide range of factors. While that may sound like a bit of a copout, we can offer some guidelines to thinking about costs that will help you to get a better idea of possibilities. If you want a more exact idea based on your unique factors, the best path is to schedule a free consultation to discuss your needs.
With that said, as you think about how much a Seattle financial advisor could cost, here’s what you should consider.
How Financial Advisors Are Paid
To understand how much a financial advisor might cost, we have to first define the methods by which financial advisors are paid.
There are several frameworks advisors use to set costs, varying based on your circumstances and on the preferences of the advisor. These include:
The most common method financial advisors use to collect fees is to charge a percentage of assets under management (AUM). Typically, these fees range from 0.25% to 1.25% of AUM – depending on the level of service and account size.
Generally, the larger the account size results in lower AUM %. Under this framework, if you have a $1,000,000 portfolio and your investment advisor charges 1.0% AUM fee, the annual fee would be $10,000. If you have a $5,000,000 portfolio, your advisor might charge a 0.5% AUM fee, in which case your annual cost would be $25,000.
Flat Retainer Fees
Another common fee method that financial advisors employ is to collect a combination of an % AUM and a flat retainer fee. This is a typical arrangement when the size of an account is lower, but there still is a significant amount of time spent with the client managing and planning finances. Many lower-net-worth individuals (folks who are starting to build their personal wealth but aren’t too far along yet) opt for these structures.
While it’s rarer (especially for advisors who are actively managing portfolios), some advisors may charge hourly rates, with fees dependent on how much time they spend working on your account.
Most often, hourly rates for financial advisors start at $200 per hour and increase depending on factors like experience, focus area, and AUM. From the client perspective, this format requires a good deal of trust in the advisor, because it doesn’t necessarily incentivize good portfolio performance – just time on the clock.
One-Time Project Costs
If a financial advisor is engaged on a one-time project – such as a financial plan – they may charge a one-time fee for its completion. (I structure almost all of my financial plans this way).
Portfolio Performance Fees
Finally, some investment advisors are compensated for the performance of the portfolios they manage. This is different from AUM in that it goes the next step toward incentivizing earnings. Portfolio performance fees are always contractually agreed upon ahead of time.
The Takeaway: Financial Advisor Costs Are Flexible
So, as you can see, while there are a variety of different models of engagement, there’s no hard number for how much a financial advisor might cost. The good news is that you can almost certainly find a financial advisor to meet your needs, no matter your budget.
A Concrete Example of Seattle Financial Advisor Costs
To make things more tangible, let’s review a real-life example: my own pricing structure here at Sapling Wealth Management.
I offer services under a few different pricing models, tailored to individuals in different circumstances.
- For financial planning only (which involves three to four meetings and approximately 15-25 hours of assessment on my end), payment is $1,500 to $4,500 per plan.
- For advice (including a financial plan) and money management, I offer services under a $150 monthly ongoing retainer and a flat 1.0% fee of AUM.
- For individuals with liquid assets over $500,000, I offer a sliding fee for AUM.
While the cost varies per client, these numbers should give you a baseline toward what you might expect.
Ready to Get Started with a Seattle Financial Advisor?
Hopefully, this information has been helpful as you consider your own financial planning or advising needs and evaluate potential costs against your budget.
If you’re looking for more guidance, let’s talk.
I’m the sole practitioner at Sapling Wealth Management, a boutique advisory firm that provides thoughtful, tailored financial guidance to individuals here in Seattle. I offer both customized financial plans and ongoing wealth management at the prices listed above (you can view my personal wealth management service page for more details).
If you’re ready to grow your assets with thoughtful investment advice, we may be a good fit. Schedule a review of your portfolio today, and let’s take the first step toward figuring out what’s best for you.